APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. Mark G. Mastroianni, U.S. District Judge.
Valeriano Diviacchi, with whom Diviacchi Law Office was on brief, for appellant.
J. Christopher Allen, Jr., with whom Troy K. Lieberman and Nixon Peabody LLP were on brief, for appellee.
Before Howard, Chief Judge, Selya and Lynch, Circuit Judges.
LYNCH, Circuit Judge.
This suit, about a water heater, concerns the appropriate standard for determining when consumer transactions styled as " leases" are in fact disguised " credit sales" or " retail installment sales." If so, they are subject to disclosure requirements under federal and Massachusetts' consumer protection laws. See Truth in Lending Act (" TILA" ), 15 U.S.C. § 1601 et seq.; Massachusetts Consumer Credit Cost Disclosure Act (" CCCDA" ), Mass. Gen. Laws ch. 140D, § 1 et seq.; Massachusetts Retail Installment Sales and Services Act (" RISSA" ), Mass. Gen. Laws ch. 255D, § 1 et seq.
Plaintiff Kim Philibotte alleges that the defendants, Nisource Corporate Services Company and AGL Resources, Inc. (collectively " Nisource" ), engaged in deceptive business practices by disguising credit sales of hot water heaters as leases to avoid making the required disclosures. The district court found that Philibotte did not qualify for protection in light of the statelaw standards governing these transactions, and dismissed her suit. The district court reasoned that the decision of the Massachusetts Supreme Judicial Court (" SJC" ) in Silva v. Rent-A-Center, Inc., 454 Mass. 667, 912 N.E.2d 945 (Mass. 2009), which controls Philibotte's RISSA claim, also controls both her federal and state TILA claims in light of the similarity of the RISSA and the CCCDA (Massachusetts' TILA), which governs the applicable standard for both Philibotte's state and federal TILA claims under an exemption granted to Massachusetts. See Belini v. Wash. Mut. Bank, FA, 412 F.3d 17, 20 (1st Cir. 2005) (explaining that Massachusetts has been granted an exemption that displaces " federal [TILA] law in favor of state [TILA] law" ); see also 15 U.S.C. § 1633; 12 C.F.R. § 226.29(b)(2).
We affirm on alternate grounds. Philibotte's federal claim under TILA, 15 U.S.C. § 1640, is barred by the statute of limitations. As to the pendent state law claims, which are timely, we affirm dismissal for failure to state a claim. We agree that Silva controls Philibotte's RISSA claim, but apply the plain statutory language to resolve her CCCDA claim on narrower grounds. I.
" Because [Philibotte] challenge[s] the district court's dismissal of [her] claims under Fed.R.Civ.P. 12(b)(6), we [briefly] recite the facts and reasonable inferences raised by the facts in [her] favor." Salois v. Dime Sav. Bank of N.Y., FSB, 128 F.3d 20, 22 (1st Cir. 1997).
In January 2011, Philibotte's hot water heater at her home in Chicopee, Massachusetts, stopped working. She contacted Columbia Gas, allegedly a Nisource entity, whose agents evaluated her water heater and told her that the " best and cheapest way to proceed" would be to " lease" a new Ruud water heater for $204, made in twelve monthly payments of $17. They gave her such a lease, which she signed. Philibotte alleges that the agents never explained the terms of the lease, provided her with any TILA disclosures, or informed her that the full retail market value of the heater (including installation) was only $400 to $500.
The lease, which was attached to the complaint, carried a minimum term of twelve months, after which either party could terminate the lease without penalty on 30 days written notice. It also included a buyout option that could be exercised at any time. The buyout price varied depending on how many monthly payments had been made to date, decreasing over time to a minimum of $75. The lease did not require Philibotte to return the heater upon termination, unless demanded, and the parties dispute whether the transaction contemplates such a return.
Neither Philibotte nor Columbia Gas terminated the lease upon completion of the minimum term in January 2012. Philibotte continued to lease the heater for two more years, until February 2014, when she contacted Columbia Gas to exercise her option to purchase. She alleges that Columbia Gas's response to her request " ma[de] all sorts of misrepresentations and waivers" to disguise the fact that this was the culmination of a disguised credit sale. Despite these, she signed the required " appliance sales agreement," under which she paid an amount roughly equivalent to the lease's buyout price.
Philibotte filed this putative class action against Nisource in March 2014. She alleged three disclosure violations under both federal and state law: (1) a federal claim under TILA, 15 U.S.C. § 1601 et seq.; (2) a state law claim under the RISSA, Mass. Gen. Laws ch. 255D, § 1 et seq.; and (3) a state law claim under the CCCDA, Mass. Gen. Laws ch. 140D, § 1 et seq. She also brought an unjust enrichment claim and a Massachusetts 93A claim based on the alleged mischaracterization of the transaction as a " lease." The complaint sought, inter alia, class certification, compensatory and statutory damages, and equitable relief including rescission.
The district court found that the transaction did not qualify for protection under the standard for identifying consumer leases subject to RISSA protection that was articulated by the SJC in Silva v. Rent-A-Center, Inc.,454 Mass. 667, 912 N.E.2d 945 (Mass. 2009). See Philibotte v. Nisource Corp. Servs. Co., No. 14-11300, 2014 WL 6968441, at *3-6 (D. Mass. Dec. 9, 2014). The district court also found that the same standard applied, and so precluded, Philibotte's ...